Girls Gone Wild Founder Joe Francis Has Bankruptcy Court Troubles

Posted in: General Bankruptcy

Girls Gone Wild founder Joe Francis is in deep trouble in bankruptcy court.  Girls Gone Wild filed for Chapter 11 bankruptcy protection in February 2013.  Shortly thereafter, Francis agreed not to interfere in the company’s business.

As the company continued to operate under the court’s supervision, Francis was accused over the following months of various misdeeds.  These include making threats to employees, hiding company cars, transferring intellectual property to another company, and having his girlfriend block the bankruptcy court trustee’s access to the building.  Eventually, an injunction issued requiring Francis to stay 100 feet away from the company’s headquarters.

In April 2014, the bankruptcy court ordered company assets sold for over $1.8 million.  In May, Francis and his girlfriend allegedly came to the company’s headquarters and screamed obscenities at employees, resulting in the police being called.  A second occurrence followed a few days later.

A motion for contempt was filed against Francis for ignoring court-ordered sanctions.  At the hearing, Francis argued that the 100 foot-injunction no longer applied after the company’s assets were sold.  He also argued that company employees were the aggressors when he visited the office in May.  The company cars, he claims, were seized outside of a Mexican strip club and he cannot get them back.

The Bankruptcy Court Judge, Sandra Klein, did not buy Francis’s argument and found that the injunction was violated.  She ordered Francis to immediately return the vehicles or pay the clerk $5,000 a day for each day they remained missing, and pay $41,000 in attorneys’ fees and costs.

In a document filed with the court, Judge Klein stated that ” the facts of this case justify issuing arrest warrants as a coercive sanction for civil contempt.”  Because current case law is murky on whether or not a bankruptcy judge has the power to issue an arrest warrant, she referred the matter to the District Court.

Should Francis be arrested, it would not be his first time behind bars.  He was sentenced to jail last year following convictions for a 2011 incident of false imprisonment and assault.